Marketing environment 130211002459-slaphappy (1)

MARKETING ENVIRONMENT

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Marketing Environment

Philip Kotler :

“ A company marketing environment

consists of the factors and forces that

affect the company’s ability to develop and

maintain successful transactions and

relationships with its target customers.”

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Micro environment Macro environment

Controllable PartiallyUncontrollable

Co Organization Suppliers Demographic

Management Customers Economic

Resources Dealers Ecological

M Mix Competitors Technological

Community Political

( Social groups) Sociological

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The inputs concerned with micro environment are –

• Company organization

• Suppliers

• customers

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The outputs concerned with macro environmentare –

• Political

• Economical

• Technological

Macro environment factors may be –

Controllable or partially - controllable

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Micro environmental factors

Company :

• Company organization consists of Board of Directors and functional managers.

• Marketing plans are drawn up as per the philosophy of Top management

• Marketing decisions like new products, expansion, etc depend on the support of top management. It depends upon finance, managerial skills, organization’s strengths and weaknesses.

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1. Company - continued

• Marketing plans should be in harmony with policies of other departments such as production, purchase, finance, personnel, etc

• For ex: quality depends upon production policies

• Advertising and sales promotion – on budgets

Dr.S.G.Kulkarni 7

2. Suppliers

• Supply raw materials, plant and equipments,

human resources, technology

• Their strategies affect ours

• If they increase prices, we have to revise price

structure

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2. Suppliers - continued

• Decisions like ‘ make or buy’ depend upon suppliers

• Depends upon

– Right supplier

– Right place

– Right time and lead time

– Right price

– Right quantity

– Right quality

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2. Suppliers -continued

• Good relations are required for successful

marketing

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3. Intermediaries

• Wholesalers, retailers, agents,

transporters, warehousers, ad agencies,

etc.

• This is a choice of channel of distribution

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4. Customers

• Purchase requirements vary from customer to

customer

• Individual customers are influenced by cultural,

social and psychological factors

• They are large in number, scattered, poorly

informed, buy in small quantities and frequently

and are guided by personal considerations

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4. Customers

• Industrial producers are limited in number, geographically concentrated, buy in large in bulk, demand is derived, buy on reciprocal basis, depend on lease hold.

• Dealers buy for resale.

• Government buys for public welfare, defence

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5. Competitors

• Supply similar products or substitute

products

• Competitors adopt different actions for

getting greater share of markets

• All firms compete with each other for

consumers buying power.

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6. Public

• Financial public: financial institutions, investment houses, insurance co,

• Government public:

• Citizen action public: consumer organizations, environmental groups, minority groups, etc

• General public: public image

• Internal public: employees, Board, labour unions, press and media

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Macro environment

1. Economic

Economic forces influence both marketers and the consumers

Economic forces include –

• Competition – monopoly, oligopoly

• Buying power

• Willingness to spend

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Macro environment

1. Economic - continued

Economic conditions include

• Economic development

• National income

• Standard of living

• State of agriculture

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Macro environment

1. Economic - continued

• Business cycles

• Interest rate

• Price levels

• Fiscal policies

marketers have to take into

consideration the changes taking place in

agriculture and industry

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2. Demography

Demography gives ‘consumer profile’

It is the study of population in respect of its

size, density, location, age, race,

occupation, marital status, education, sex

composition etc

All these factors influence marketing

decisions

2.Demography - continued

• School Kids with Income and Purchasing

Power

• Mother Older, Baby Younger

• Double Income, No Kids

• Poor Urban Population

• Well Off Older Folks

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• Mexico is a nation of young population

• Japan – ‘old generation’

• America was a melting bowl. Now it is a

‘Salad bowl’ with Chinese, Filipinese,

Japanese, Asians, Koreans

• Ads – show women as decision makers

due to increase in education

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Demography - continued

Education

• Illiterates

• High school drop outs

• Matriculates

• Graduates

• Professional degrees

• Post graduates

Dr.S.G.Kulkarni 22


• Buying habits are determined by income,

education, age, family composition and

other demographic factors

• It helps in - Market segmentation, demand

forecasting, determination of market

potential

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• India’s population is roughly 108 crores

• 75% of population lives in villages

• Rural marketing offers immense

opportunities and challenges to a creative

marketer

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• You find that the demand is increasing not

only for farm products, but also for non-

farm products

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Technology

• It has a definite impact on buyers and marketers

decisions

• It provides mechanical, physical and numerous other

processes which help in attaining higher standard of

living

• It has adverse effects like pollution, unemployment,

increase in crime rate, etc

• Marketers must be aware of new developments in

technology.

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Technology-continued

• Technological developments may put

some people out of business and at the

same time, open up new business

opportunities to others

• For ex: introduction of synthetic fabrics

drove away sheep raisers and cotton

growers out of business

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technology

• Solar pocket calculators and hand

cameras

• CDs and Video tapes

• Virtual reality applications in Marketing is a

new application due to technological

progress

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• Technological developments have improved the standard of living and given more leisure time

• Improvements in communication, transportation

• Technology has given wonder drugs like Ampicilliin, by- pass surgery,

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• Technology grows out of research made

by business, universities

• Most of the products that we talk today

were not there a few years back. For

example, Computers, Photostat, laser

technology, scanners.

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3. Natural factors and ecological factors - also

• These also affect the pattern of industries

and marketing

• Industries create pollution of air, water and

environment

• The package in the form of plastic bags

and bottles create a lot of problems

• Some governments have banned the use

of plastic bags.

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Political factors

• Marketing is affected by monetary, fiscal, import and export policies

Some of the Acts applicable are as follows:

• Essential Commodities Act

• Prevention of Food Adulteration Act

• Trade and Merchandise marks Act

• Packaged Commodities Act

• Companies Act

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Political factors - continued

• Political and legal factors are inter connected

• Discontinuation of – CCI, FERA, IDRA

• Introduction of SEBI, FEMA, VAT

• Rules allow private participation in transportation

, telecom, airlines

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Social-Cultural environment

• Advertisements and culture

• Some ads are banned on TVs

• Festivals like Ganesh festival, Diwali, Id-

Milad, Christmas,

• Dress styles are different

• School uniforms

Dr.S.G.Kulkarni 34

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Cultural factors - continued

• Food habits

• Internet practice

• Fast foods – Pizza hut, Ken Fried Chicken

Cultural factors - continued

• There are several movements like trade

union movement, consumer movement,

women's lib, deprived classes movement ,

etc.

• These have their own expectations from

the market. If they are against their ideas,

they boycott the products

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Cultural factors - continuedCause related Marketing

• 1980 saw the advent of “ cause related

marketing”

• The distinctive feature of case-related

marketing is the firm’s contribution to a

designated cause being linked to

customers’ engaging in revenue-producing

transactions with the firm

• Example: CRY, AWWA, WWF cards

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Cultural factors

• Cultural and ethical forces are of vital

importance

Marketing environment 130211002459-slaphappy (1)

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